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Intel plans to spend between one an $1.5 billion dollars retooling its plant in Rio Rancho, New Mexico so that it can begin production of 45-nanometer chips by late 2008 at the site.45-nm chip In all, Intel plans to spend $5.5 billion this year on factory and equipment upgrades; its biggest competitor AMD plans to spend less than half that in FY2007. Intel expects to have three 45-nanometer production facilities in operation by mid-2008 with a plant opening at Hillsboro, Oregon during the second half of this year and additional plants coming on line in Chandler, Arizona and Kiryat Gat Israel in late 2007/early 2008. By comparison, AMD does not plan to bring its first 45-nanometer chips online until mid-2008. In other news, Intel announced it was closing its Jerusalem-based 'fab 8' factory as a result of the opening of other Israeli facilities; the company is hiring an additional 50 employees for its Jerusalem-based R&D facility.

Sources: Wall Street Journal, MarketWatch (i), (ii), Jerusalem Post
Commentary: IBM To Announce Major Challenge To Intel-Dominant DRAM TechnologyAll Chips Are Not Created EqualAMD in Trouble: Needs to Raise Cash & Develop Products
Stocks/ETFs to watch: Intel (NASDAQ:INTC). Competitors: Advanced Micro Devices (NYSE:AMD), IBM (NYSE:IBM). ETFs: HOLDRS Semiconductors (NYSEARCA:SMH), iShares Goldman Sachs Semiconductor Index Fund (IGW), PowerShares Dynamic Semiconductor (NYSEARCA:PSI), Vanguard Information Technology ETF (NYSEARCA:VGT)

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Source: Intel Continues To Ramp Up 45-Nanometer Production Spending